RUSSIA SAYS TURKEY BACKS ALL ITS ENERGY PROJECTS
By Gleb Bryanski

Reuters
Jan 13 2010

Putin says expects Turkey to clear S.Stream in 2010

MOSCOW, Jan 13 (Reuters) – Russia said on Wednesday it has won Turkish
support for all its major oil, gas and nuclear projects while carefully
avoiding its usual harsh criticism of the rival trans-Turkish EU-backed
Nabucco gas pipeline.

Russian Prime Minister Vladimir Putin told a news conference after
talks with Turkish Prime Minister Tayyip Erdogan Ankara had pledged to
fully clear Russian gas pipeline project South Stream before November
2010, when building is due to begin.

"We have an agreement that before November 10, 2010 … the Turkish
government will make all the necessary judgements and issue a
construction permit. In the course of today’s talks Mr Erdogan
confirmed these intentions," Putin said.

"I very much hope this work will be finished as planned," he said,
adding that the work on South Stream was going according to plan with
environmental, geological and seismic studies near completion.

Putin also said the project, which apart from Russia’s gas export
monopoly Gazprom (GAZP.MM) involves Italy’s ENI (ENI.MI), may benefit
from an inter-governmental agreement between Russia, Turkey and Italy.

Russia designed South Stream to deliver gas to southern Europe under
the Black Sea to rival Nabucco and bypass Ukraine.

But the need to bypass Ukraine may decrease if Kiev elects a more
pro-Russian president at an election this month and save indebted
Gazprom (GAZP.MM) billions of euros it needs to spend on South Stream.

Some analysts have suggested Gazprom may even one day join Nabucco,
which is so far lacking volumes to make the project profitable.

Turkey aspires to become a key transit hub for Europe, but is facing
a tough balancing game between rival projects supported by Moscow
and the European Union. [ID:nLDE60A13N]

Once Cold War foes, NATO member Turkey and Russia have in recent years
deepened their ties by signing a raft of agreements from gas and oil
pipelines to nuclear power plants, and have sought closer security
cooperation in the Caucasus region.

Turkey, which is using the energy card to promote its membership of
the EU, has insisted that South Stream and Nabucco are not rivals,
but complementary.

Putin said the governments of Italy, Turkey and Russia should also
consider signing a deal to support an oil link between Turkey’s Black
Sea coast and the Mediterranean. [ID:nLJ71240]

He said cooperation between the two states should involve asset swaps
between major firms and added Russian firms were ready to take part
in privatisation of Turkey’s state assets.

Both Putin and Erdogan pledged to increase the use of national
currencies in bilateral trade, currently at $15.3 billion, which the
leaders want to boost to $100 billion within the next five years.

Turkish Energy Minister Taner Yildiz and Russian Deputy Prime Minister
Igor Sechin also signed a memorandum on building nuclear power plants
in Turkey in a sign Russian firms would be given a second chance to
build Ankara’s first plant.

Turkey cancelled a previous tender to build a nuclear power station,
after a court earlier ruled the tender, won by Russian Inter RAO
IRAO.MM and Atomstroiexport and Turkey’s Park Teknik, invalid due to
problems it cited with the pricing of electricity from the plant.

[ID:nLK400328]

KARABAKH

Putin told Erdogan that Turkey should not link the problem of
Nagorno-Karabakh, a region of Azerbaijan populated by ethnic Armenians
who are now in control of the area, to its bilateral relations with
Armenia.

"Both the Nagorno-Karabakh problem and the Turkish-Armenian problem
are very complicated by nature. I do not think it is a right thing
to tie them into one package," Putin said.

"It is unwise from both tactical and strategic point of view to
package these problems," he added.

Turkey closed its border with Armenia in 1993 in protest over Yerevan’s
backing for Karabakh separatists. The two countries signed accords
last October to establish diplomatic relations and open their border.

The accords are still pending parliamentary approval.

Turkey says it will go through with its deal with Armenia only if
the latter makes concessions to Azerbaijan on Nagorno-Karabakh but
Armenia says attempts to link a thaw in relations with the Karabakh
issue would not work. For a factbox on Russian gas pipeline projects
[ID:nL5035511] For a factbox on Nabucco [ID:nLE022229] For a factbox
on Turkish-Armenian ties. [ID:nLE357596] (Writing by Dmitry Zhdannikov;
editing by Sue Thomas)